There’s a popular doomsday scenario where Sydney and Melbourne collapse from the intolerable burden of their populations doubling to 8 million by circa 2050. Traffic grinds to a halt and commuters take forever to get to work according to this dismal prognosis, resulting in an epidemic of social problems like increasing rates of mental illness, family breakdown, obesity and diabetes (e.g. see here, here and here).

The fear of size has lead various commentators to argue strongly for growth to be redirected to regional centres. Indeed, in the absence of a convincing environmental or equity rationale, it’s one of the fallback arguments trotted out in support of huge public subsidies for high-speed rail (HSR).

Yet some of the world’s most productive metropolitan areas are already much bigger. London’s population is 14 million, Paris is 12 million, New York is 20 million, Chicago is 10 million, Dusseldorf is 11 million. These are also some of the most desirable places in the world to live so it’s possible their size might actually be an advantage.

It’s not a mystery. A new study confirms what’s been known for donkey’s ages: larger cities are more productive. Commuting and the productivity of American cities, by Shlomo Angel and Alejandro Blei from NYU’s Stern Urbanisation Project, examined 347 metropolitan areas in the US and found that when the population of a city doubles, its GDP increases by more — on average, by 120%.

Incomes aren’t the only positive thing that increases with city size. So do myriad social opportunities like the chance to meet other people with similar interests and the availability of a larger number of prospective friends.

Angel and Blei tell us why bigger is usually better; in particular, bigger cities have bigger labour markets. When they examined a subset of 40 cities, they found that when the total number of jobs doubles, the number of jobs that commuters reach within a 60-minute commuting range increases on average by 97%.

The authors provide a concrete example. With 7.6 million jobs, New York was twice as large in 2000 as Chicago with 3.8 million. And workers in New York reached 6.2 million jobs within a 60-minute commute compared to 3.6 million in Chicago; i.e. 85% more.

“We must conclude therefore that the added friction created by the need to commute further and for a longer time in larger cities did compromise the size of their metropolitan labour markets but only to a very limited extent. The size of the metropolitan labour market — defined as the number of jobs that could be reached within a given time — almost doubled in cities with double the number of jobs or, more generally, with double the population.”

This finding is consistent with what we already know: commute times increase only modestly with population and are remarkably similar across cities irrespective of their size. Thus, according to this league table, the average commute in Chicago is 30 minutes compared to 34.4 minutes in New York. Angel and Blei found commute times increase on average by just 7% when population doubles.

The researchers offer three key explanations:

  • While all cities spread further as they get larger, they also get a lot denser, making origins and destinations closer on average. When population doubles, the area of US cities increases on average by only 70%;
  • Investment in transport infrastructure increases as cities get larger (in the sample of US cities examined by Angel and Blei, that’s mainly roads); and
  • The most important factor, though, is that workers adapt to slowing commute times. Many stay put, but many also change their home address to be closer to work and/or they change to a job that’s closer to home.

While it’s harder to do a lot about constraints like geography or incomes, cities can take steps to aid the adjustment process. For example, as they grow they could:

  • Improve mobility, by improving the efficiency of the transport system. That covers investment in new public and private transport infrastructure, as well as making better use of existing infrastructure e.g. via pricing.
  • Increase accessibility, by encouraging the redevelopment of established urban areas at higher employment and residential densities.
  • Facilitate adaptation by reducing obstacles to households and firms relocating to new addresses; e.g. by eliminating stamp duty liability on housing purchases (the stamp duty on a $1 million dwelling in Victoria is $55,000).

Accommodating population growth within cities makes at least as much sense as spending big on infrastructure like HSR to create sprawling dormitory suburbs in the regions. Growth is better viewed as an opportunity for our larger cities than as a problem.